VIENNA (Reuters) - OPEC Friday gave grounds for optimism that the
oil cartel
will mount its third supply increase in a year to soothe an
international outcry
over high energy costs.

The Organization of the Petroleum Exporting Countries, under fire
to ease
fuel bills and temper inflationary pressures, is thought likely to
lift output
by about 700,000 barrels daily, just under 3 percent, when it meets
Sunday.

``OPEC is going to do its part to lower the crude price to within
the target
band,'' said Saudi Oil Minister Ali al-Naimi, referring to the
cartel's
preferred price range of $22-$28 a barrel.

But petroleum producers should not take sole responsibility for
prices that
hit decade-highs this week, he added on his arrival in Vienna.

``We hope that the consuming countries will do their part to lower
the
product price and lower the burden (on consumers),'' Naimi said, a
reference to
taxes that account for three-quarters of the price of petrol in
Europe.

Expectations are that Saudi, OPEC's leading producer, will add its
share of
new oil to a large dose of leakage that already has the kingdom
pumping well in
excess of its official quota.

That pushed world crude prices Friday sharply lower from
Thursday's 10-year
highs. London Brent futures lost $1.80 to close at $32.75 a barrel
and U.S.
light crude finished $1.79 easier at $33.60.

Iran, OPEC's second biggest supplier and traditionally an oil
price hawk,
signaled that it would not block extra production.

``We do not seek exceedingly high oil prices nor do we seek to
create an
artificial shortage of supply on the market,'' Iranian Oil Minister
Bijan
Zanganeh said from Tehran.

Fuel Protests

Fuel protests in France and Spain and renewed calls in the United
States for
a release of government petroleum stocks have highlighted a growing
impatience
among OPEC's customers for the group to take strong action.

Finance leaders in the West, though, suggested that fears of
another
1970s-style recessionary oil shock around the corner are misplaced.

Germany, rejecting calls for the government to drop plans to raise
energy
taxes, said high fuel costs posed no threat because inflationary
pressures in
other parts of the German economy were low.

And International Monetary Fund Managing Director Horst Koehler
said of oil's
spike: ``It's casting a shadow on the outlook but I am confident the
global
economy is strong enough to cope.''

Traders are doubtful that an extra 700,000 barrels daily from
limits now of
25.4 million will be enough for a sustained move lower for prices
ahead of the
winter.

Since most OPEC countries already are pumping to capacity, any
significant
increase would have to come from leading producer Saudi Arabia.

Saudi Leaks

Saudi's Naimi said in New York earlier this week that Riyadh
already was
pumping 600,000 barrels a day more than the allocation it was awarded
in June.

And insiders said Saudi's share of extra OPEC supplies would come
on top of
the leakage, taking the kingdom's output beyond nine million barrels
a day for
the first time in nearly 20 years.

Industry observers say petroleum stocks in the West, particularly
of heating
oil, are so low that unless the northern hemisphere has a very mild
winter crude
prices may stay firm for some months to come.

They say OPEC was too slow earlier this year in easing the output
restrictions that carried prices from a 22-year low in 1998.

``They've left the market hostage to fortune,'' said Mehdi Varzi
of Dresdner
Kleinwort Benson. ``But if they go for 700,000 bpd that at least
should
undermine some of the market speculation.''

With inventories drained, refiners are loathe to do more than
operate
hand-to-mouth, declining to rebuild stocks for the time being at such
high
prices, hence perpetuating the shortages.

Charlie, I hope you've just misspoken yourself rather than
resorting to outright falsehoods, to wit: "And this little note takes
care of the OilZombies BULL SHIT that the Saudis "couldn't ship
anymore because they are at full production". THEY HAVE BEEN
SHIPPING EXTRA BBLS !!!!. "

No one, and I repeat NO ONE YOU DUMB SHIT, except perhaps
you, ever said the Saudis were at capacity. In fact, every story,
every post, every reference to S.A. I can recall here stressed the
fact that S.A. was one of the few OPEC countries WITH excess
capacity. Jeez, even when you try to get it right, you get it wrong.
Your obsessive behavior is getting alarming, Charlie.